HC nod for winding up Wockhardt; company to appeal
12 March 2011
The Bombay High Court on Friday admitted a winding-up petition against Mumbai-based pharmaceutical company Wockhardt in a lawsuit brought by holders of $74 million worth of foreign currency convertible bonds (FCCBs).
Wockhardt defaulted on the FCCBs in 2009, and went into a corporate debt restructuring (CDR) process last year.
This ruling by the court allows the petitioners - the FCCB holders - to ask the court to appoint a liquidator. If a liquidator is appointed, the creditors will be able to monitor all business activities of the company which has defaulted.
Justice S C Dharmadhikari pronounced the operative part of his order admitting the winding-up plea at 3.30 on Friday afternoon in his chambers at the Bombay high court. A written and signed copy of the order had yet to be delivered to various parties involved in the court case.
A Wockhardt spokesperson confirmed that judge had admitted the petition filed by trustees to the bondholders. "We will appeal the judgement," he said.
Wockhardt's FCCB holders are seeking to recover their investments through a sale of the troubled pharma company's assets. These include Singapore-based hedge fund QVT Financial LP and an overseas unit of Sun Pharmaceutical Industries. These bondholders had earlier rejected a fresh settlement proposal and had been pressing ahead with a winding-up petition.